Since the mid-1980s, there has been a significant movement toward global markets, especially the privatisation of the State-Owned Enterprises. Recently, after a more than three decades of excessive reliance on the public sector, Libya has pursued privatisation of its public sector. This paper explores the underlying forces of the economic reform, especially with respect to the privatisation of industrial sector, in Libya. It is found that privatisation has been pursued in Libya as result of its own policy plan, rarely after pressures from the international lending agencies. It has been embarked on with more pragmatic and less ideological base

Libya has become a transition economy due to global industrial and political changes in the past decades. Being for long time under government control has created a number of challenges for the management of the SOEs. The most challenging aspect is firm performance improvement. Based on a pilot study, this paper develops a conceptual model that determines the firm performance after transition. The results show that despite the change of managerial incentive, behaviour and relationship; the performance of investigated firms did not improve. This can be explained by firm's restructuring, privatisation method, trade openness, and the weak enforcement of law.